Many Bay State country clubs and marinas whose revenue streams jumped ship during the recession have now bailed themselves out, and see the perfect economic storm that ruined several fairways finally subsiding.
Many, but not all.
The is set to be auctioned off this week after its owners missed mortgage payments and the lender foreclosed on the property.
The course is owned by a Massachusetts entity controlled by Hayden R. Jones, a managing director at Washington, D.C.-based private-equity firm The Carlyle Group, and Marc St. Pierre of Clayton, Mo. According to sources close to the club that spoke on condition of anonymity, the owners control several other golf courses nationwide, some which were floundering, and that impacted their ability to pay for The Ridge Club.
The company bought the 86-acre, 18-hole course – which also features a 17,800-square-foot clubhouse and other outbuildings – for $5.9 million in 2007, a far cry from the $2.5 million former owner Mark Ventre paid in 2003.
Daniel McLaughlin, whose company Daniel P. McLaughlin Co. is handling the auction, could not offer an asking price, but said he has spoken with investors from as far away as California that have expressed interest in the course.
Not Business As Usual
Despite the pending sale, players are still contemplating iron and wedge shots on The Ridge Club’s manicured fairways, and members are still paying dues – albeit on a month-to-month basis rather than in one lump sum at the start of the year, given the course’s uncertainty, said Bob Higgins, general manager.
The Ridge Club is one of many golf courses in the commonwealth that have seen financial troubles during the recession. Sterling National Country Club in Worcester was foreclosed on and sold to a national operator in 2009; and Pleasant Valley Country Club in Sutton was foreclosed on last year. Several more have been to the very brink of insolvency, but were able to fight through.
Some clubs have been forced to drastically reduce their initial joining fees and yearly dues. Willowbend Country Club in Mashpee used to charge roughly $150,000 just to join. That figure has since been dropped to about $30,000 or $35,000, according to Higgins. At The Ridge Club, members were paying $30,000 to get in as recently as 2008. In 2009, that entry fee was lowered to $7,500 for a limited amount of new memberships, then bumped back up to $10,000. When foreclosure proceedings began in July, The Ridge Club stopped taking new members.
The value of a country club is different things to different people. To Higgins, the value is in the dues from members plus the revenue from weddings and other functions. Of course, a real estate developer interested in purchasing the property might think to turn the land over to residential development.
McLaughlin maintained that everyone he has spoken with has expressed interest in keeping The Ridge Club as a golf course. In any case, a developer would be subject to town zoning regulations before making any changes. Also, there are questions of whether the larger development the golf course is part of is required to retain the links as “open space” as part of its original agreement with Sandwich. Sandwich planning officials were unable to provide that information by press time.
Making A Choice
But while The Ridge Club’s peer courses may not be facing the same financial issues, they have some problems of their own as a result of the recession.
Nestled in an inlet of Buzzards Bay, the Woods Hole Golf Club has been largely unaffected by the recession – monetarily, that is. The 112-year-old course in Falmouth owns the land it is built on and the only effect Bob Marshall, treasurer and chair of the club’s finance committee, said he has noticed is that the club’s 15-year waiting list has been shortened to two years. Still, he stressed that cannot be wholly blamed on the economic downturn. There is the often high age of applicants to consider as well, many of whom cannot wait around for a membership – especially if they decide the weather is better in Florida.
“We don’t have any houses to sell or land to sell. We’re a golf club, period,” Marshall said. “You have to ask, do you want to be a golf club member or a real estate developer? You have to pick one or the other. It’s not rocket science. It’s the real estate-driven clubs [that have gone out of business].”
Golf courses aren’t the only luxury products to feel the effects of the financial crisis. From Boston to Barbados, marina and yacht club owners saw their businesses contract 20 percent to 40 percent, said Charles Lagasse, a 25-year industry veteran and waterfront developer from Newburyport.
Lagasse purchased the Boston Yacht Haven last year after former owner Yovette Mumford lost the property in a highly publicized bankruptcy. Lagasse said since he only bought the club recently, he could not say how much business it lost in 2009 – what he called the bottom of the luxury boating market. However, the business has seen an uptick of about 15 percent in the last year.
“I think the resurgence is because people that can charter boats and yachts are feeling better about the stock market, given where things have gone in the last year,” Lagasse opined. “I think anybody that was in the golf club-type business as well as the marina business is probably seeing a resurgence right now – if they were able to get through ’08 and ’09. Boston Yacht Haven didn’t make it, and many golf clubs didn’t make it … but our bookings are substantially up from ’10 and look like they’re going to be consistently up again in 2011.”
